Skin in the Game

New Mexico quietly mulls the end of Medicaid as we know it

Just because we are homeless doesn’t mean we can’t do anything,” Sophia Cranmer says as she watches over her four children, Jerrmy Jr., Debrah Lynn, Michael and Brandon, ages 2-10. The Cranmers are staying temporarily with their friends Bryan and Marlene in a small, two-bedroom apartment in southeast Albuquerque.

By the summer of 2011, Sophia and her family had been homeless for more than six years. They lived part of the time on the road, part of the time out on Albuquerque’s Parajito Mesa, an undeveloped stretch of land with no water or electricity, and periodically with Bryan and Marlene. Two years ago, Sophia’s husband was diagnosed with an aggressive cancer. He passed away this past spring. The sun shines down on the pavement in front of Bryan and Marlene’s apartment, where a memorial for Jerrmy Sr. is etched into the cement, his handprints alongside his children’s.

Faced with raising a family alone, Sophia spends every day getting her life back on track: looking for a place to live, enrolling her children in schools and even returning to school herself at Central New Mexico Community College. Nothing comes easily for a single mother of four.

But the Cranmers have two major sources of assistance. The first is Bryan and Marlene, who stepped in to help, despite being disabled and on limited incomes themselves. The kids obviously feel safe and at home with them: Brandon is sleeping in a buggy; Debrah Lynn and Michael are singing a song they just made up; Jerrmy Jr. is doing pushups to build his muscles.

The second is Medicaid, the state’s health program for low-income families. Sophia says she couldn’t have pulled through without either the program or her friends. But while she knows Bryan and Marlene will always be there to support her family, she isn’t as sure about New Mexico’s Medicaid program. As state officials work to redesign Medicaid, Sophia, along with thousands of other New Mexicans, worries that the program she relies on for health care and other assistance may suddenly evaporate.

On May 26, 2011, the state approved a contract with Alicia Smith and Associates, a Washington, DC-based group that specializes in health care reform, to redesign New Mexico’s Medicaid program. Officials call it “Medicaid modernization,” a term many Medicaid recipients consider euphemistic.

More than 550,000 New Mexicans receive Medicaid—mostly children, along with senior citizens and disabled people who live at or below the poverty line. Medicaid recipients make up one-fourth of New Mexico’s total population and rely on public funding for services. For every dollar New Mexico spends spent on Medicaid, New Mexico chips in 30 cents, and the federal government contributes 70 cents—one of the highest federal match percentages of any state.

Currently, an estimated 60,000 low-income disabled, elderly and childless adults are on waiting lists for Medicaid services, and about 50,000 children are eligible but not identified, according to Quela Robinson, a staff attorney for the New Mexico Center on Law and Poverty. As the demand for Medicaid services continues to grow, state officials say the program’s costs will rise beyond what New Mexico can handle.

“I see the projections every month, and we are not keeping pace with the growth of the program,” Sidonie Squier, the secretary of New Mexico’s Human Services Department, which administers Medicaid, tells SFR.

“We’re expecting 130,000-175,000 new Medicaid members.”

Part of the reason for the expected increase is the federal Patient Protection and Affordable Care Act enacted in March 2010. The portion of the act that requires everyone in the country to have health insurance or else pay a fee—and requires states to pay matching costs for additional people who become eligible for Medicaid—takes effect in 2014.

According to HSD Communications Director Matt Kennicott, new Medicaid enrollees will cost the state an additional $330-$660 million between 2014 and 2019.

“I don’t know where the state is going to come up with that kind of money,” Squier says.

According to a November 2011 report by the National Governors Association and the National Association of State Budget Officers, Squier’s concern is a common one.

Sophia Cranmer and her kids rely on New Mexico’s Medicaid program for support, but they worry that an upcoming redesign might leave them hanging.

“Nearly every state implemented at least one new Medicaid policy to address costs” in fiscal year 2011, the report states—either by restricting the rates Medicaid providers can charge or by limiting benefits available to Medicaid recipients. In coming years, Medicaid spending is expected to grow faster than the economy as a whole. Stimulus funding used to shore up Medicaid funding during the first years of the recession has evaporated; economic hardship has raised the number of people who need assistance; and rising medical costs, combined with the new health care law, are driving up costs.

But state Sen. Gerald Ortiz y Pino, D-Bernalillo, says New Mexico can handle the cost of new enrollees. What’s more, he says, state officials are missing a golden opportunity for growth in the health care sector.

“We are burying our heads in the sand,” Ortiz y Pino says. “The [PPACA] will boost the economy by bringing in jobs and services.”

Still, many state officials maintain that the program is unsustainable.

“Health care costs are rising because the medical inflation rate keeps going up,” Julie Weinberg, the state’s Medicaid director, explains. “We are working very hard to find the efficiencies to slow that growth.” Exactly what those efficiencies are remains unclear, and state officials are offering few specifics.

The Medicaid redesign began, some say secretively, last spring, when the state sent out a request for proposals to secure a firm to help with the process.

New Mexico’s plan to modernize Medicaid is now in the hands of Alicia Smith and Associates, whose winning proposal is costing the state $1,698,543.75.

“This [contract cost] will be justified—if things turn out in favor of New Mexico’s most vulnerable, if people get off waiting lists and start getting services, if there are no new co-pays, if all children get enrolled and get medical services,” Robinson says. But those are some big ifs.

Over the summer, state officials (with the support of Alicia Smith and Associates), held six public hearings and one tribal-state consultation on the proposed modernization. More than 1,000 people attended—a tiny fraction of the total number of New Mexicans enrolled in Medicaid. At each meeting, officials presented a set of prepared principles: personal responsibility, administrative simplicity, care coordination and pay for performance.

Following the public hearings, HSD held four invitation-only work group meetings for stakeholders—advocates, tribal members, and representatives from hospitals, pharmacies and state-contracted managed care organizations, or MCOs. At each meeting, officials emphasized the concept of personal responsibility, or “skin in the game.”

“Research shows that everyone (whether insured through Medicaid, Medicare, or privately) uses health care resources more wisely if they have some ‘skin in the game,’” a slide in HSD’s public hearing PowerPoint states.

The reasoning is simple: If Medicaid recipients have to pay more for services, they’ll only use what they really need.

This theory is at the core of New Mexico’s Medicaid modernization initiative—and it’s one of the key elements of the redesign that alarms Medicaid recipients.

“People reacted in a predictable way: with fear,” state Sen. Dede Feldman, D-Bernalillo, tells SFR. “Consumers and medical providers are fearful of cuts and increased co-pays.”

At the public hearings, state officials touted the benefits of savings accounts and co-pays as ways to motivate people to invest in cheaper, preventive health care methods rather than waiting until they need to go to the emergency room.

“When people engage in healthy behaviors—when they take the infant to all the doctor’s visits, when they take the child to the dentist…if they lose weight or quit smoking, if they do those kind of things—we are looking at setting up some sort of an account that money would go in…and be used for any medical services that Medicaid doesn’t cover,” Squier said of proposed health savings accounts at a July 6 public hearing in Clovis.

During the same presentation, Squier also mentioned co-pays for Medicaid recipients “on a sliding scale, based on need, for those who can pay.”

To some advocates, the idea of raising deductibles or increasing co-pays for the state’s poorest population smacks of partisan ideology.

“There is a lot of talk in conservative circles, these days, about personal responsibility, skin in the game,” Robinson says. “You see it especially in times of economic stress: It’s the old welfare myth, the idea that the poor are irresponsible and not doing their part.”

Edwin Gonzalez-Santin, the director of Arizona State University’s Office of American Indian Projects, says the euphemism of “skin in the game” is a misplaced metaphor that comes from executives who want employees to invest in their companies. It’s a distraction, he says, that masks what’s really going on.

“States are looking for convenient targets—people who do not have champions and are too busy scraping by to fight the system,” Gonzales-Santin tells SFR. Co-pays, he says, won’t solve the rising costs of Medicaid. Instead, he says, “It costs states more as a result and creates greater complexity on state level to deal with premiums. It is a myopic response that endangers the most vulnerable.”

Ortiz y Pino shares that view.

“Making poor people pay co-pays is self-defeating,” he says. “When they can’t afford it, they don’t go to the doctor, and then they get sicker.”

Robinson adds that, especially in New Mexico, already a poor state, many Medicaid recipients may simply be unable to afford higher co-pays—or may have to sacrifice other necessities in order to pay for health care.To Sophia, co-pays mean less food on the table. With four kids, co-pays could easily cost $65 a month—enough to feed her whole family for a week.

“It always seems to be the poor who put out 100 percent more than the people who have hundreds of dollars to spare,” Sophia says.

The other three principles of Medicaid modernization floated in the public hearings—administrative simplicity, care coordination and pay for performance—also aim to streamline costs, but advocates and recipients are skeptical about what they entail.

Care coordination basically involves connecting Medicaid recipients with a single care provider equipped to handle all of their needs, regardless of age, disability or income.

“We want to incorporate all services into what we are calling a second generation of care so that you go to a managed care organization, and it’s for newborns to nursing home and everything in between, so you don’t have to go to different places,” Squier explained at the July meeting in Clovis. “No matter where you are in your cycle of life, they will have expertise and services to help you.” Few other specifics have surfaced.

The “pay for performance” principle would require Medicaid contractors—Presbyterian, Amerigroup, Evercare and others, which currently offer services at a flat rate—to be more accountable by chronicling the services they provide. The state, in turn, would only pay for what contractors actually deliver.

The final principle, “administrative simplicity,” is also controversial. One idea floated during the hearings was a “global waiver.” Instead of separating Medicaid recipients into programs according to their needs, the waiver would lump a host of other Medicaid recipients—including disabled, elderly and HIV/AIDS-suffering—together in a single program.

“I don’t want my corner of the world telling people with AIDS how to live,” Hardy said [briefs, Nov. 16: “Medi-Cuts”]. “The whole Medicaid redesign smacks of ‘We want to cut services and money and blame you for being poor and sick.’”

Community outrage like Hardy’s did make a difference. Jim Jackson, the executive director of Disability Rights New Mexico, says the developmental disability waiver will remain under the New Mexico Department of Health instead of being wrapped into HSD’s proposed global waiver.

But Jackson adds that about 20,000 New Mexicans with disabilities will be impacted by Medicaid modernization because many of them also receive medical assistance through the same MCOs contracted to provide Medicaid services.

“We have stressed to Alicia Smith that people with disabilities require frequent medical visits, and if they have to do a co-pay every time, it is economically challenging,” Jackson tells SFR. “We are quite concerned that this will be a barrier to the care they need.”

At the Medicaid modernization hearings, people slammed the state for suggesting higher co-pays even as the program failed them on so many levels—with lengthy waiting lists; a dearth of providers who accept Medicaid, especially in rural and tribal areas; and a lack of personal care options, such as Meals on Wheels and caregiving for the elderly and disabled.

As Weinberg points out, many Medicaid recipients also lack the health literacy needed to take advantage of certain aspects of the program.

“The services are there,” Weinberg says. “I think a lot of it is people not understanding what is the best in terms of taking care of themselves and accessing the health care and the diagnostic services and preventative services that would help them.”

Kidney disease is a perfect example. In 2009, Medicare spent $9.2 billion nationally on the treatment and medication of dialysis patients, according to the Medicare Payment Advisory Commission’s March 2011 report to Congress. If managed, type 2 diabetes can be controlled through exercise and healthy foods. Curricula such as Diabetes Education in Tribal Schools, a national program to prevent type 2 diabetes in Native American children, a population that is seeing a startling rise in childhood onset diabetes, were developed by Native American educators and several federal agencies to help with the effort of managing this chronic disease, but funds for outreach were discontinued last year.

Robinson wonders how the state is going to help people learn good health and nutrition habits while simultaneously trying to provide these services, especially for the thousands of New Mexicans on Medicaid waiting lists (and the thousands more who will become eligible in 2014).

“Providing more services when you are worried about current and projected costs just doesn’t add up,” Robinson says. “No one is talking about getting these people off the waiting lists.”

In August, the public hearing process concluded; since then, state officials have been tight-lipped about the redesign. At press time—six months after the modernization process began—the governor’s office had not yet released the redesign concept paper promised by Alicia Smith and Associates, nor offered any specifics on when it may become public.

But Squier revealed a few clues about its content at a Dec. 6 Legislative Finance Committee meeting, promising that there will be no reduction in benefits for current Medicaid enrollees and no change in the eligibility threshold, which starts for some programs at 100 percent of poverty level.

Squier’s PowerPoint presentation to the LFC closely resembled the ideas she raised at the hearings—a global waiver, coordinated care, and financial incentives and disincentives to hold health care providers responsible for improved health outcomes. As for the controversial “personal responsibility” principle, Squier’s presentation says state officials still haven’t made a decision about co-payments, but that there will be some form of incentive “payments” such as a “debit” card to reward Medicaid enrollees for healthy behaviors.“We still don’t know what the full plan looks like,” Robinson tells SFR. “Nothing has changed.”

State Rep. Ray Begaye, D-San Juan, expresses continued frustration at the process, calling it a cloak-and-dagger approach.

“Information needs to get to the taxpayer, instead of playing games when people’s lives are at stake,” Begaye tells SFR.

Quela Robinson, a staff attorney for the New Mexico Center on Law and Poverty, says approximately 50,000 children are eligible for Medicaid, but not receiving it.

Other lawmakers share Begaye’s concerns.

“Medicaid is an important program that serves as a safety net for the many New Mexicans who rely on it for vital health services,” US Rep. Ben Ray Luján, D-NM, writes SFR in an email. “It should be strengthened and protected, and any efforts to change the program should be done in an open and transparent manner so that the impact of those changes can be fully examined. We will have to see all the details of the final plan, but I am very concerned with proposals that increase costs for those who are struggling to get by during this difficult economic time.”

In New Mexico, the state Legislature has limited oversight of the Medicaid program, and changes can technically be made without legislative input, even though they do require the approval of the federal Centers for Medicaid and Medicare Services. Under federal laws, states can request changes to their Medicaid programs as long as the changes don’t cost the federal government any more money, Robinson says.

But many state lawmakers say they’ve been excluded—not only from the state’s decision to redesign the program, but also from the ostensibly public scoping process.

“The first day [HSD] presented [its plan to reform Medicaid], we asked how we were going to have input,” Ortiz y Pino says. “They said we would be able to attend the public hearings.”

At a July 28 hearing in Albuquerque, however, state Sen. Cisco McSorley, D-Bernalillo, expressed outrage. “I don’t understand where your $1.7 million went,” McSorley said. “I am very disappointed in this process. We should start all over.”

In McSorley’s view, the redesign process wasn’t aimed to involve all New Mexicans.

“Many of my constituents were left out,” he says. “When it includes only one branch of government and one political party, the process was not bipartisan.”

Feldman adds that, over the years, the Legislature ceded much of its power over the Medicaid program to HSD.

“Now, it’s like putting the genie back into the bottle,” she says. Over the years, Feldman says, HSD has made numerous changes to the program—and now they want to make more. “This zigging and zagging disrupts services and people’s lives,” Feldman tells SFR. “They need to decide on one path.”

State officials, however, insist on the necessity of a redesign.

“There is little argument from Democrats and Republicans alike that we cannot sustain the current growth of this program, in dollars and lives, without bringing it into the 21st century,” Kennicott argues. “Opinions may differ on how to do this, but all can agree that our current system is not a sound, stable building block for the future.”

Approximately seven states nationwide are currently in the process of reforming their Medicaid programs. Though partisan leadership in those states falls on both sides of the aisle, in many cases, according to the National Association of Medicaid Directors, personal responsibility is part of the plan.

Still, Judy Solomon, vice president for health policy at the Center on Budget and Policy Priorities, says that, while improving coordination of care is a common goal, the personal responsibility concept, which includes mandating co-pays and savings accounts, can be ideologically motivated.

“Most states are working on improving coordination of care for people with multiple chronic conditions,” Solomon explains. “This is separate from the more ideological proposals in some states that would deny services to people who don’t pay their co-payments or provide health savings accounts in lieu of a defined package of benefits.”

US Rep. Martin Heinrich, D-NM, points out that, ideologically motivated or not, adjusting co-pays and implementing new savings accounts stands to have an outsize effect not only on New Mexico’s poorest population, but also on Native Americans.

“As the state of New Mexico works to reorganize its Medicaid program, it’s essential that transparency guidelines be adhered to,” Heinrich writes SFR in a Dec. 7 email. “Consultation is absolutely critical to the government-to-government relationship between tribes and the federal government. Tribes, Indian health programs and urban Indian organizations should be given an opportunity for input and be active participants in drafting the new plan. We must continue to remove barriers to health care in Indian country, not create them.”

To some, the notion that Medicaid recipients don’t have enough “skin in the game” is laughable. Take Sophia, who notes that her life and the lives of her children depend on Medicaid.

“I take my responsibility of being a mom very seriously,” Sophia says. “It’s my job as their mom—whether I am homeless or whether I have money—to make sure they have skills. Everything I try to do for my family is help them grow up to be strong, and when they are older, they can do what they want to do.”

At the public hearings, many said Medicaid was the only thing allowing family members to live out their days in dignity, helping children receive needed health care, and keeping disabled and elderly people in their own homes.

On Dec. 1, the Legislative Health and Human Services Committee voted in favor of a proposal to require legislative approval for all major changes to Medicaid. But Ortiz y Pino, noting that Gov. Susana Martinez could simply veto the proposal, called it “an exercise in futility,” according to the Santa Fe New Mexican.

In his conversations with SFR, Ortiz y Pino lamented the process’ opaque nature.

“They are doing this behind a thick, velvet curtain,” he says. “Whatever comes of this will not include input from New Mexicans and what they want.”

Jerrmy Cranmer Sr.’s memorial is visible at the home of family friends Bryan and Marlene, who frequently support the rest of the Cranmer family.

Sophia’s advice to other low-income parents is to hang in there. She’s thinking of starting an organization to help families who are homeless and in need of services like Medicaid.

“I have been through hell and back, but look at me now. I didn’t get into drugs,” Sophia says. “My whole world crashed when my husband died. We were together 24/7: We worked together; we loved together; we raised our kids together. We were homeless, but we were a real family.”

The Begays, an elderly couple living in the Navajo community of To’Hajillee, are Medicaid enrollees who still have yet to receive in-home caregiving services [Big Picture, Oct. 4: “Winter is Coming”].

Sophia has a lot to share with others, and she is far from the welfare stereotype. After staying at Bryan and Marlene’s this past summer, Sophia and her children moved into a home of their own in September with the help of St. Martin’s Hospitality Center. The children are excelling in school, and Sophia is studying at CNMCC to become an airplane mechanic.

On a south side street in Albuquerque, where two pairs of handprints are permanently pressed into the bare cement, it’s obvious that the Cranmers have more than skin in the game: They have a past and a future that’s etched into the city streets. Sophia hopes that, like the handprints, the Medicaid program will be there in the future for families like hers. SFR

Native Injustice?

Amid all the negotiations about Medicaid’s future, one of New Mexico’s most underprivileged populations—Native Americans—is also underrepresented. Although Native Americans in New Mexico die 20 years earlier and have the highest incidences of diabetes and heart disease in the state, many say the proposed principles of Medicaid modernization fail to address their particular challenges.

“We have seen a loss in services from the federal government over the years because of federal budget cuts. We do not do follow-up in the homes because resources are limited. We rely on the Medicaid programs to help people to receive additional services,” Sharon Martinez, the patient service coordinator for Indian Health Services’ Taos/Jicarilla Service Center, reported at an Aug. 3 state/tribal Medicaid modernization meeting. But, she added, it’s a program that hasn’t successfully reached all Native people, and there’s a long way to go. “There needs to be a lot of outreach. Native elders don’t know what a co-pay is, what an [health maintenance organization] is or an MCO. All these terms are foreign to them.”

Martinez was one of 79 Native American health educators, advocates and tribal leaders who testified at the Aug. 3 meeting. Ron Lujan, a spokesman for the New Mexico chapter of the National Indian Council on Aging, was also there—despite the fact that the meeting fell on a day many tribes were occupied with religious and cultural activities. “We need cardiologists, cancer specialists, endocrinologists that can look at these diseases,” Lujan said. “On diabetes, we need primary podiatrists and diagnosis.”

Some critics, however, say Native American concerns mostly went unheard.

“They talk about tribal input, but there was none,” state Rep. Ray Begaye, D-San Juan, tells SFR. “I am requesting appropriate tribal consultation with all tribal leaders being at the table [with the state], and not just the three leaders who were able to attend the Aug. 3 meeting.”

Due to the potential for significant cuts to Indian Health Services, Begaye says, Native Americans living in the deepest pockets of poverty are the most vulnerable.